Major Cycle*(Long-term trend lasting several months to years) Positive

* Cycle status is based on S&P 500.

Market Overview – What We Know:

Round of buying pushed major indexes higher Thursday with Value Line index and NASDAQ Composite threatening to make new highs. S&P came in third with Dow Jones Industrial Average in fourth place relative to recent all-time highs.

Market volume rose nearly 10% compared to Wednesday’s levels.

Short-term trend in S&P 500 has taken on more positive tone. Intermediate and Major Cycles remain positive.

Short-term volatility has moved back to “Neutral” with a slightly positive bias.

Daily MAAD was positive Thursday by 14 to 6 and rallied to its best level since beginning of intermediate rally back on November 16 and to also its best level since March 2009. Daily MAAD Ratio was “Neutral” at 1.03.

Daily CPFL was positive Thursday by 3.03 to1, but remains below new short to intermediate high reached April 12. Daily CPFL Ratio was toward “Neutral” at 1.00.

Market Overview – What We Think:

Follow-on strength in major indexes Thursday has put market back in “No Man’s Land.” Positive movement on Minor Cycle appears to have reversed recent short-term negative back to positive, but until prices make new all-time highs above April 11 levels (1597.35—S&P 500), strength must be regarded as mere return action toward recent highs.

Given fact that Cumulative Volume (CV) remains weaker in all indexes than pricing, it appears as if rally over past several days has been driven by weaker players. If new highs are created, however, bullish case will nonetheless be re-asserted to extent best levels since March 2009 would be evident.

How Minor Cycle negative plays out will determine staying power of larger Intermediate Cycle that has been underway since November 16, a trend that is “Overbought” and historically mature.

Until larger Intermediate Cycle is decisively ended, we must regard all short-term pullbacks as merely corrections in larger cycle trend. Recent pullback is no exception.

Index

Price Channel Stops (10-Bar MAs of Highs/Lows )

Weekly

Monthly

4/22

4/23

4/24

4/25

4/26

4/26

4/30

S&P 500 Index

BUY1582.43

BUY1582.07

BUY1581.54

BUY1577.28

SELL1552.16

SELL1513.68

SELL1349.76

Dow Jones Industrials

BUY14782.57

BUY14787.00

BUY14789.13

BUY14770.56

BUY14733.98

SELL14038.80

SELL12653.67

NASDAQ Composite

BUY3271.91

BUY3272.63

BUY3268.14

BUY3259.71

SELL3206.12

SELL3163.27

SELL2882.50

Value Line Index

BUY3535.13

BUY3528.46

BUY3522.30

BUY3507.84

SELL3440.86

SELL3409.09

SELL2859.75

Note: Stop levels, a function of the extant trend, are based on the trailing moving average price channels for the Highs or the Lows of an index. Whether or not a specific index is suggesting a “Buy” or Sell” is determined by whether or not index prices are above or below the current channel Stop levels. Stop levels should only be used as an entry or exit guide and in conjunction with other market entry and exit strategies.